Saturday September 1, 2012
MSWG unhappy about structure of Astro’s upcoming listing
By JOHN LOH

PETALING JAYA: The Minority Shareholder Watchdog Group (MSWG) is unhappy
about a number of issues related to how the upcoming listing of Astro
Malaysia Holdings Bhd is structured.

“Our grouses still remain with regards to the listing and delisting
exercises currently being done by many Malaysian conglomerates,” chief
executive officer Rita Benoy Bushon said in the Aug 30 edition of MSWG's
newsletter.

She said Astro, if it was floated at RM3.60 per share, would be valued
at RM18.7bil, far exceeding the RM8.3bil price at which it was
privatised in 2010.“Here, Astro is listing without its foreign operations in India and
Indonesia. We understand that Sun Direct TV business in India has about
seven million subscribers as at last year despite only starting in 2008.
“What's more, around two-thirds of the initial public offering (IPO)
comprises offer-for-sale shares, which means the proceeds will go to the
major owner, not the company,” she added.

The pay-TV operator, which has a subscriber base of some three million
users and a market penetration of 50% of Malaysian households, is
offering up to 1.52 billion shares, or 29.2%, of its enlarged share
capital at its IPO expected next month.

Based on the indicative price of RM3.60 per share for bumiputra
investors as reported by Reuters, the listing could raise up to
RM5.47bil, making it the third largest in the country this year behind
Felda Global Ventures Holdings Bhd and IHH Healthcare Bhd's RM9.93bil
and RM6.3bil IPOs respectively.

Only 474.3 million, or 31.2%, of the shares to be sold are new, giving
Astro's existing shareholders the bulk of the gross proceeds at 70%.

The offer-for-sale shares are to be sold by Astro founder Ananda
Krishnan and Khazanah Nasional Bhd, although they will still command a
70.8% interest in the company post-IPO.

Bushon explained that another sticking point about the listing is the
portion allocated for retail investors, which was just the minimum 2%.

“We hope the advisers and the company would consider allowing the
clawback provisions from other portions, including cornerstone
investors, if there is an oversubscription of the retail portion, say by
more than five times.

“And will the regulator step in to manage the way companies are listed and delisted in Malaysia?” she asked.

A total of 1.26 billion shares, or 24.2%, of Astro would be offered to
local and foreign institutional investors, including bumiputra
investors, and just 260 million, or 5%, to retail investors.

Of this, some 103.95 million shares, or 2% of the firm's enlarged share
base, has been allocated for the general public, with half of that for
retail bumiputra investors.

The remaining retail shares would be offered to Astro employees, customers, directors and contractors.

Astro had said in its prospectus exposure that 58% of the IPO proceeds
would be used for capital expenditure and 29.3% to repay bank
borrowings. The balance would be kept for working capital purposes and
to defray listing expenses.